If you have bought or sold a property, chances are you would have worked with a conveyancing lawyer. But lets find out more about property conveyancing the gifting of properties, and So what happens to a property when the owner passes on.
1. What does a conveyancing lawyer do and when should I engage one (and is it necessary)?
Conveyancing is the legal transfer of property from one owner to another. When it comes to buying or selling a property, there is a lot of legal and administrative work to do before completion of the transaction. Although selling a property may seem like a straightforward transaction, there are numerous details that can go awry if you’re not careful.
A lawyer would also be best suited to deal with the bank in order to ensure that disbursement is on time, as well as to deal with the different parties involved (Central Provident Fund Board, the Singapore Land Authority). You will need someone who knows all the ins and outs of real estate law to help you avoid any potential pitfalls.
As property is never homogenous, each deal or transaction is unique in its own way. An experienced conveyancing lawyer would be able to understand the nuances of each deal.
2. Can I gift a property? How do I do so and what are the fees or taxes involved?
It is legal to give away real estate in Singapore without receiving monetary compensation. You can give away property by effecting a Deed of Gift between the transferor and transferee.
If you intend to give away a private property, it will be prudent to check with your bank and the Central Provident Fund Board to determine any outstanding encumbrances on the title of the property. In certain cases, because the property purchase was financed using a loan or CPF funds, it may be necessary to first redeem your mortgage and discharge the CPF charge by refunding your CPF accounts.
It is also important to note that the relevant stamp duties, both buyers’ and sellers’, would still have to be paid. Stamp duties are still payable on the market value of the share of the property to be given away and therefore it is necessary to obtain a valuation report on the market value of the property to calculate the relevant stamp duties which may be payable.
3. What happens to the property (HDB flat and private home) after the owner passes away?
a. What if the property was owned by a single owner?
b. What if the property was owned by joint owners?
c. What happens to the outstanding home loan, taxes and other outstanding fees such as conservancy, maintenance charges? Who will bear the burden to pay for these?
Generally, if the loan was taken in one person’s sole name, the debt would be inherited by the deceased’s estate.
However, if there are two borrowers, the co-borrower would be responsible for the outstanding loan. In this case, the next thing to consider would be whether the property is an HDB or a private property.
HDB Flat
If the deceased had used his/her Central Provident Fund (CPF) account savings to pay the monthly bank loan instalments of his or her HDB flat, he/she would have been insured under the Home Protection Scheme (HPS).
Under the HPS, if the mortgagor passes away, the CPF Board will settle the outstanding housing loan up to the insured sum, with HDB or the bank which provided the housing loan, directly.
The HPS is compulsory for all individuals who use their savings from their CPF account to pay for their HDB flat.
However, the HPS does not cover private residential properties, such as executive condominiums (ECs) or privatised Housing and Urban Development Company (HUDC) flats.
Private Property
The surviving mortgagor will have to bring a Grant of Probate or Letters of Administration (if there is no will) to the bank as evidence that he or she has rights to assume responsibility of the mortgage.
Upon which, the surviving mortgagor can discuss with the bank of the possible ways to pay for the mortgage, especially when he or she do not have the means to do so.
d. What if the deceased owner did not make a will before passing, what happens to the property?
If the deceased owner did not leave a valid will behind before he passed away, Singapore’s rules on intestate succession, as outlined below will determine how the deceased’s estate is distributed to his survivors.
Source: PROPNEX
4. If a person/owner is intending to declare as an undischarged bankrupt, what will happen to his/her property/properties?
A Bankrupt’s assets will be vested in a court-appointed trustee, who will manage the Bankrupt’s financial affairs. They cannot sell or deal with any of their assets or items of value. The trustee will be responsible for doing so.
Assets include anything of value belonging to the Bankrupt either at the date of the bankruptcy, or obtained after that date. This includes gifts that the Bankrupt receives.
There are certain types of assets that are protected from creditors, such as Housing & Development Board (HDB) flat or Central Provident Fund (CPF) account funds.
Source: PROPNEX
Read more: 5 Essential Skills to Learn When Living Alone for the First Time: Singapore Edition, What is the HDB Flat Eligibility (HFE) letter?, The Continuum
